LGC 4.11 - Tax Reduction and Cleanup Act - STATUTE

[KaiserDave]

We can and should pass a tax reform bill. The tax system in Lincoln is byzantine and an undue burden on working people. I believe we will need a comprehensive look at our entire tax system.

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Question is on the Amendment below:

Tax Reduction and Cleanup Act

1. New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%   $100,000 - $4,999,999
12% $5,000,000 - $49,999,999
20%  $50,000,000 - $249,999,999
24%  $250,000,000 - $499,999,999
28%  $500,000,000 - $2,499,999,999
31%  $2,500,000,000+

2. Unenforced Taxes Cleanup
--- Any type of tax that is not collected at all under the 2021-22 budget, despite still having authorizing statute in force, is hereby repealed. In cases where the tax only composed a part of the statute, the remainder of the statute shall remain in force.

3. Repeal of the Tourist Tax
-- Recognizing that this Tax raises very little revenue and stifles regional Tourism, the Tourist Tax (L.C. 4.3) is repealed.

4. Effective Date
-- This shall take effect immediately.
-- Taxpayers shall still be liable for the pre-existing taxes for the time period before this law went into effect, but shall pay according to this law for any activity after this bill goes into effect.

Sponsor: Speaker Dwarven Dragon
Occupying: Slot 5 of 6

No

[Utah Neolib]

My amendment reforms the bill to make it the most ambitious tax reform bill ever passed, and stops needless tax breaks for the rich.

[Utah Neolib]

Aye

[Brother Jonathan]

Nay

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

The amendment fails 1-2

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Now that that's overwith, A look at our current active, enforced revenue streams:

PROPOSED TAXES

Income tax
0.0%    $0 - $49,999 0 B
5%   $50,000 - $99,999  18.33125 B
15% $100,000 - $249,999  85.7347812955 B
22%  $250,000 -$489,999  20.1666641379 B
36%   $490,000 - $999,999 70.11771 B
45%   $1,000,000 +  63.10915385 B

Rates remain the same for married couples filing jointly, but brackets are doubled.

INCOME TAX TOTAL REVENUE: 257.459559283 B

Alcohol Tax
12% ($6.84 B)

Tobacco Tax
35% (L.C. 6.18) (9.975 B)

Cannabis Tax
12% ($2.49 B) + $1.25bn (L10.25.4) = $3.74 B

Wealth Tax - 3%

Total Wealth Tax with Lincoln Population Multiplier = $39.31 Billion

Property tax
5%   $1,000,000 +

Total with Multiplier: $1500 bn

Corporate Tax
0.0%  $0 - $99,999 ($0 B) * .36 = $0
5%   $100,000 - $499,999 ($0.27 B) * .36 = .0972 B
8%   $500,000 - $999,999 ($0.256 B)* .36 = .09216 B
10%  $1,000,000 - $4,999,999 ($1.00 B) * .36 = .36 B
14% $5,000,000 - $9,999,999 ($0.952 B)*.36 = .34272 B
15%  $10,000,000 - $24,999,999 ($1.94 B) * .36 = .6984 B
19%  $25,000,000 - $49,999,999 ($2.305 B) * .36 = .8298 B
23%  $50,000,000 - $99,999,999 ($3.404 B)* .36 = 1.22544 B
26%  $100,000,000 - $249,999,999 ($6.639 B)* .36 = 2.39004 B
30%  $250,000,000 - $499,999,999 ($8.9 B)* .36 = 3.204 B
32%  $500,000,000 - $2,499,999,999 ($44.902 B) *.36 = 16.16472 B
36%  $2,500,000,000 + ($340.56 B) *.36 = 122.6016 B
Total Corporate Tax with Lincoln Population Multiplier = ($148.00608 B)

Carbon Tax (L.C. 2.20)
$33 per metric ton of CO2: $42.9367714281 B

Tourist Tax (L.C. 4.3): 0.1245052828 B

Fines (L.C. 6.19): 0.0988656 B

So for ideas beyond the current text (cleaning up corporate and striking the Tourist Tax), I see the following:

- Reduce/Flatten the Income Tax Further. While we gave everyone making under $490,000 a tax cut in the last budget, we could certainly knock down the top two rates some or maybe go to a three bracket system or something.

- Address the fact that we are funded mostly through a property tax and are thus somewhat dependent on the real estate market. We certainly need most of that money given the programs we have and the desire to maintain our surplus, but are there better and less volatile ways to raise it?

- Bring back the Estate Tax, though probably at a lesser rate. This is what we are no longer enforcing as of the last budget:

Estate Tax
15%  $10,000,000 - $19,999,999 ($0.61 B)
15%  $20,000,000 - $49,999,999 ($1.66 B)
20%  $50,000,000 + ($6.79 B)
Total Estate Tax with Lincoln Population Multiplier = ($2.82 B)

- Enact the scheduled increase in Carbon Tax we declined to do in the last budget (to $37)

- Additional Excise Taxes: People have talked about having a tax on fast food products or having a tax on pitbull ownership. To be clear, this wouldn't ban it, just tax it. This could be an excellent time to enact it.

[Utah Neolib]

Tax Reduction and Cleanup Act

1. New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%   $100,000 - $4,999,999
12% $5,000,000 - $49,999,999
20%  $50,000,000 - $249,999,999
24%  $250,000,000 - $499,999,999
28%  $500,000,000 - $2,499,999,999
31%  $2,500,000,000+

1. Enact the scheduled increase in Carbon Tax we declined to do in the last budget (to $37)

2. Unenforced Taxes Cleanup
--- Any type of tax that is not collected at all under the 2021-22 budget, despite still having authorizing statute in force, is hereby repealed. In cases where the tax only composed a part of the statute, the remainder of the statute shall remain in force.

3. Repeal of the Tourist Tax
-- Recognizing that this Tax raises very little revenue and stifles regional Tourism, the Tourist Tax (L.C. 4.3) is repealed.

4. Effective Date
-- This shall take effect immediately.
-- Taxpayers shall still be liable for the pre-existing taxes for the time period before this law went into effect, but shall pay according to this law for any activity after this bill goes into effect.

Sponsor: Speaker Dwarven Dragon
Occupying: Slot 5 of 6

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Objecting to the amendment

Question is on the amendment

NAY (my opposition is rooted in the elimination of the new corporate tax rates, I support adding the new 1. as a standalone amendment not striking the existing 1.)

[Utah Neolib]

Aye

[Brother Jonathan]

Nay

I don't really think drastic cuts are needed to the rates overall, but I do see the merit in having the corporate tax rate structure simplified. So while I am not necessarily in support of the bill as proposed I also think this amendment goes too far.

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Rejected 1-2

Amendment to add the carbon tax piece:

Tax Reduction and Cleanup Act

1. New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%   $100,000 - $4,999,999
12% $5,000,000 - $49,999,999
20%  $50,000,000 - $249,999,999
24%  $250,000,000 - $499,999,999
28%  $500,000,000 - $2,499,999,999
31%  $2,500,000,000+

2. Unenforced Taxes Cleanup
--- Any type of tax that is not collected at all under the 2021-22 budget, despite still having authorizing statute in force, is hereby repealed. In cases where the tax only composed a part of the statute, the remainder of the statute shall remain in force.

3. Repeal of the Tourist Tax
-- Recognizing that this Tax raises very little revenue and stifles regional Tourism, the Tourist Tax (L.C. 4.3) is repealed.

4. The previously scheduled yearly increase in carbon tax is reinstated. This will result in a tax of $37 per metric ton for the remainder of the 2022 fiscal year, and a $4 increase each fiscal year thereafter.

4.5. Effective Date
-- This shall take effect immediately.
-- Taxpayers shall still be liable for the pre-existing taxes for the time period before this law went into effect, but shall pay according to this law for any activity after this bill goes into effect.

[KaiserDave]

Agreed with BroJo
Simplification yes, big cuts no

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

As we are addressing it via LGC 4.12, withdrawing my amendment, and without Objection, Sections 2 and 3 are removed from this bill.

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

I will be preparing a number of proposals for us to assess in the coming days. With the enactment of HSH, this will include implementation details for the vehicle mile tax.

[Unconditional Surrender Truman]

NO proposals! Wulfric must go!

[KaiserDave]

OUT with the vehicle mile tax!

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

A few alternatives on the corporate taxes. For reference, this was the original proposal:

New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%   $100,000 - $4,999,999
12% $5,000,000 - $49,999,999
20%  $50,000,000 - $249,999,999
24%  $250,000,000 - $499,999,999
28%  $500,000,000 - $2,499,999,999
31%  $2,500,000,000+

Alternative A (keeps new top rate of 31%, but lessens the cuts to the other rates):

New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%7%   $100,000 - $4,999,999
12%15% $5,000,000 - $49,999,999
20%23%  $50,000,000 - $249,999,999
24%27%  $250,000,000 - $499,999,999
28%29%  $500,000,000 - $2,499,999,999
31%  $2,500,000,000+

Alternative B (keeps new top rate of 31%, but forces more corporations toward the higher remaining rates):

New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%   $100,000 - $4,999,999
12%  $5,000,000 - $49,999,999
20%  $50,000,000 - $249,999,999 159,999,999
24%  $250,000,000 160,000,000 - $499,999,999 379,999,999
28%  $500,000,000 380,000,000 - $2,499,999,999
31%  $2,500,000,000+

Alternative C (Same as A, but lessens the reduction of the top rate)

New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%7%   $100,000 - $4,999,999
12%15% $5,000,000 - $49,999,999
20%23%  $50,000,000 - $249,999,999
24%27%  $250,000,000 - $499,999,999
28%29%  $500,000,000 - $2,499,999,999
31%33%  $2,500,000,000+

Alternative D (Adds back the old top rate for very profitable corporations while keeping a 7 rate structure. Yes, I would go back on my opposition to the old top rate in this limited circumstance. In Light of the old top rate still being there, the preamble is slightly altered in this one.):

New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%7%   $100,000 - $4,999,999
12%15% $5,000,000 - $49,999,999
20%23%  $50,000,000 - $249,999,999
24%27%  $250,000,000 - $499,999,999 $1,500,000,000
28%31%  $500,000,000$1,500,000,000 - $2,499,999,999 5,499,999,999
31%36% $2,500,000,000+ 5,500,000,000+

These are not necessarily mutually exclusive, we could for instance combine B and C. Also I may be open to other ideas.

Think over these and post your thoughts, let's figure out where the consensus is.

---

Possible Additional Excise Taxes

Fast Food Tax:

15% Tax on the purchase of any item from a fast-food restaurant

PitBull Tax:

10% Tax on the initial purchase of any Pitbull
-- Beginning when (and only if) the Pitbull turns 1, Annual Ownership fee of 1% of the purchase price for the next 10 years, or until the Pitbull's Death, whichever is sooner.

We can take either, both, neither, modify the rates here, whatever. Just showing what the structure can look like.

---------

Couple Other notes:

- I did look at alternatives to our property tax (such as a regional sales tax), but it's not clear they would raise anywhere near as much money as it does, so I think it's best to leave that as is.
- I am open to scoping out a three or four rate income tax if people would be interested in that, this could still have a top rate of 45% or something lower.
- The Vehicle Mile Tax will be substantially clarified or perhaps even outright repealed later in the debate.

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

All right, after allowing time for proposals to be reviewed, and getting some feedback by other means, I will proceed with two amendments. A few procedural notes:

- The objection periods on these will run simultaneously
- If you are objecting, please state which amendment you are objecting to
- Expect an additional 2 amendments tomorrow

---

Amendment 1: Proposal D, above:

1. New Corporate Tax Rates
--- Recognizing that our corporate taxes need to be lessened, simplified, and flattened to ensure Lincoln's competitiveness in the global economy, Corporate Tax Rates shall now be as follows:

Corporate Tax
0%  $0 - $99,999
5%7%   $100,000 - $4,999,999
12%15% $5,000,000 - $49,999,999
20%23%  $50,000,000 - $249,999,999
24%27%  $250,000,000 - $499,999,999 $1,500,000,000
28%31%  $500,000,000$1,500,000,000 - $2,499,999,999 5,499,999,999
31%36% $2,500,000,000+ 5,500,000,000+

Amendment 2: Fast Food Excise Tax (has been modified, please read.):

2. Fast Food Tax

There shall be a:

- 2% Tax on the purchase of any item from a fast-food restaurant exceeding 599 calories
- 5% Tax on the purchase of any item from a fast-food restaurant exceeding 999 calories

Combo orders/meals shall be broken out by item for the purposes of the tax with each item taxed individually.


2.3. Effective Date
-- This shall take effect immediately.
-- Taxpayers shall still be liable for the pre-existing taxes for the time period before this law went into effect, but shall pay according to this law for any activity after this bill goes into effect.

[Brother Jonathan]

I have to give the first amendment more thought, but the second one is taking us in the wrong direction altogether. We are supposed to be simplifying the tax code, not adding even more to it.

[KaiserDave]

Agreed
No new excise taxes

[Attorney General, LGC Speaker, and Former PPT Dwarven Dragon]

Agreed
No new excise taxes

I have to give the first amendment more thought, but the second one is taking us in the wrong direction altogether. We are supposed to be simplifying the tax code, not adding even more to it.

Withdrawing the second amendment

I will hold open the objection period for a while on the first.

[Utah Neolib]

Like the first, don’t like the second.

[KaiserDave]

I believe this bill is more pressing then ever, and every section of our tax code should be discussed. My priorities are as follows:
-Simplification
-No Tax Cuts for the Rich
-No New Regressive or Excise Taxes
I trust the GC to get it done in a few weeks, before the election.

[S019]

C or D would be what I'd personally prefer